Sanjay G. Reddy's blog on economics and other subjects

The global ‘middle class’: don’t believe the hype!

There has been a lot of crowing in recent years about the so-called global middle class. Does such a thing really exist? If so, how many people belong to it and where do they live? My colleagues and I, in the Global Consumption and Income Project, attempt in our most recent paper to distinguish different concepts of the middle class and argue both that these lead to very different conclusions and that claims about the size of the global middle class are highly exaggerated. In particular, if we demand material living standards anywhere approximating those present in rich countries, then there are very many fewer new members of the middle class than often thought. (The recent Pew report described here is an exception to this general tendency). Despite poorer countries’ now sizable contributions to global growth, global ‘middle class’ consumer spending continues to be very largely accounted for the population in rich countries.